Siemens’ Bosch Deal Marks Exit From Consumer BusinessesAlex Webb and Christoph Rauwald
Siemens AG is selling its stake in a home-appliance venture with Robert Bosch GmbH for 3 billion euros ($3.9 billion) after 47 years of ownership as Europe’s biggest engineering company exits its last consumer businesses.
The deal gives Munich-based Siemens cash for its plan to buy oil-and-gas equipment maker Dresser-Rand Group Inc. for $7.6 billion to exploit the boom in the U.S. natural-gas industry and expand more profitable energy operations. Both deals were announced today.
The exit from BSH Bosch & Siemens Hausgeraete, which makes stoves, washing machines, refrigerators, shavers and hair driers, follows other disposals of Siemens consumer offerings. Once a top mobile-phone brand, Siemens paid Taiwan’s BenQ Corp. to take that business in 2006 after its market share crumbled. In 1999, Siemens folded its personal computer unit into a venture with Fujitsu Ltd. then sold the stake in 2008. Last year, Siemens exited telecommunications -- its original line of business in 1847.
“The disposal of this business is a big positive for Siemens as it continues to focus the portfolio and exit a lower-growth and lower-margin business,” Nicholas Heymann, a William Blair & Co. analyst in New York, said about the sale of the BSH stake.
Siemens Chief Executive Officer Joe Kaeser, who took over last year, is overhauling Siemens -- whose offerings range from high-speed trains and gas turbines to medical scanners -- to bolster energy assets and add software and digital monitoring that can predict faults in machines and fix them before they cause a shutdown.
Another Siemens consumer business that Kaeser is divesting is the company’s hearing-aids unit. Siemens has been making the hearing products for more than 100 years, and the business is based in Erlangen in southern Germany, home to some of the company’s largest production sites.
Siemens has already spent $1.3 billion this year buying most of Rolls-Royce Holdings Plc’s energy business, which also makes gas turbines and compressors. Kaeser told Bloomberg News in a July interview he had “firepower” for takeovers, after he unsuccessfully tried to compete with GE for Alstom SA’s gas turbines business.
Robert Bosch is buying the stake in BSH as the world’s biggest car-parts maker pushes to make more consumer products with Internet links. Bosch and Munich-based Siemens will each receive another 250 million euros from the joint venture just before it’s fully integrated. The business will continue using the Siemens brand for “the long term,” it said.
Siemens and Bosch set up their partnership in 1967. The venture makes products under each parent’s brand as well as a range of nameplates including Gaggenau and Neff.